Federal judges “get no respect” in patent appeals—but that may change

Top patent court votes to reconsider rules on "claim construction."

No court has more power over patent laws than the US Court of Appeals for the Federal Circuit, which handles all patent appeals. In an order released Friday, that court stated its intention to revisit one of the most controversial legal principles in patent law: the "de novo" review of all claim construction decisions.

"Claim construction," the process by which judges decide exactly what patent claims mean, can be one of the more sleep-inducing areas of patent law. It's also critically important. Patent lawsuits cause competing teams of lawyers to argue for hours over the meaning of seemingly straightforward words like "user" or "connected," knowing that such linguistic jujitsu can put an accused product clearly inside or outside the bounds of a particular patent.

High-level patent litigation already has a tendency to be drawn out and unpredictable, but the rules around claim construction tend to exacerbate that fact. This is because studies show a significant chunk of patent cases that get challenged over claim wording get reversed by the patent appeals court. For instance, one 2010 study showed that the Federal Circuit has similar overall reversal rates to other appeals courts, ranging from eight to 18 percent. But when it comes to claim construction, it reverses in 33 percent of cases. Another recent study analyzing patent appeals from 2002 to 2012 found that software patent claim constructions were reversed in 45 percent of cases.

District judges can't get no respect

A big part of the issue is that the Federal Circuit reviews claim construction "de novo," meaning it considers the issue literally "from the beginning," without giving any deference to the decisions already made by the district court judge. "As a result of the de novo standard of appellate review applied to our claim construction determinations, we United States district court judges feel like the late comedian Rodney Dangerfield, because our opinions 'get no respect,'" explained US District Judge James Holderman in a 2007 paper. Since the definition of a word or term in one patent doesn't necessarily have any influence on another patent in another area of technology, there's not a lot of consistency in claim constructions across cases, Holderman goes on to note.

The high rate of reversal on appeal, combined with the high stakes of patent litigation, also tends to make fighting through appeal a good option for parties that lose at district court. Taking a high-stakes patent case through trial can cost from $2 million to $5 million these days. Having already made that investment, the cost of getting a second chance on appeal, with no additional discovery costs and no requirement to spend days or weeks in front of a jury, appears relatively low.

Generally speaking in the US judicial system, legal issues are supposed to be decided by judges while factual issues are left for juries. In a 1995 decision called Markman v. Westview Instruments, the Federal Circuit ruled that claim construction is a legal issue and the Supreme Court agreed. However, the Supreme Court never weighed in on the de novo standard.

That standard has been controversial from the start, even at the Federal Circuit itself. The last time the full Federal Circuit considered this issue was 1998, in Cyber Corp. v. FAS Technologies. Judge Pauline Newman and Judge Haldane Mayer, both of whom are still on the court, objected to de novo review back then. Judge Randall Rader, now the Chief Judge, suggested that claim construction was a mixed issue of law and fact.

A case over light bulbs brought by a “patent troll”

The issue has come up in a case over light bulbs. The plaintiff, Lighting Ballast Control LLC, is a shell company set up to hold patents; it's a unit of Acacia Research Corporation. Acacia is sometimes maligned in the tech sector, since it is the largest publicly traded patent-holding company. Lighting Ballast Control (LBC) sued Philips and Universal Lighting Technologies back in 2009, saying their light bulbs infringe patent 5,436,529, which covers a type of control circuit for electrical ballasts. In 2011 the case against Universal Lighting went to a jury, which found in favor of LBC and awarded $3 million in damages.

Universal kept fighting through appeal, and a three-judge panel found errors in the judge's claim construction to throw out LBC's win. But LBC petitioned for the full Federal Circuit to consider not just their case, but the whole issue of claim construction reviews. The judges agreed. The disputed term was (get ready) "voltage source means providing a constant or variable magnitude DC voltage between the DC input terminals," and the key issue was whether that term described a "rectifier," or a device that turns an AC power line into DC voltage.

The current Federal Circuit had only nine judges sitting on it, down from the usual 12, at the time of this vote. Only five judges would have needed to vote to have the full "en banc" court re-consider the case. The judges voted on the case just hours before new judge Richard Taranto took his seat on the court; getting a case heard en banc will now require six votes. Taranto was voted in by the US Senate on March 11.

Throwing out the de novo standard would certainly help LBC, part of a litigious company sometimes called a "patent troll." But LBC's lawsuit against Universal Lighting is just one case. Overall, a change in the standard would restore more power to district judges in patent cases while lessening the power of the Federal Circuit. In the long run, that could end up being beneficial to patent defendants.

Appeals are not supposed to be routine; they're supposed to be limited to exceptional circumstances. If every court case gets an appeal... well, you can infer the consequences. That so many patent cases get time in multiple courts doesn't help due process. It reminds me of the conniving political little kid who immediately runs off to parent #2 when parent #1 unambiguously says "NO" and then proceeds to play them off each other, rolling the dice to get the answer he wants. It would seem that our appeals process has become a lot like that, at least for patents.

This is odd. Higher courts usually consider the opinions of the lower courts, at least a bit. It seems they should here too

In such cases where there is not de novo review, the appeals court show deference to the trial court's fact-finding because it makes no sense to double litigation costs and surmise factual/subjective information that was more readily available to the trial court, such as witness testimony in court. Often the appeals court has less information -- sometimes a transcript at best -- making the trial court a better determinant of fact. Markman hearings are an important part of patent litigation, but there is rarely any information presented in them that is not also identically available to the appellate court. Essentially both sides will state that "process output" is defined as "X" or "Y" to make "process output" fall squarely inside or outside of the patent claim. There's little else to consider other than the parties' filings and assertions, so there's no reason to afford a deference to the lower courts. Usually the higher courts are more specialized and are arguably better equipped to determine claim construction. That's why Markman hearings exist in the first place, since patent judges are often better suited to determine what a claim term means than a jury (seriously, try having a layperson read a patent and I guarantee you'll get 6 seconds in before their eyes glaze over).

I-ku-u wrote:

Is it worth noting that a 45% reversal rate is not very different from simply flipping a coin?

Edit (to add this afterthought): Whether that means the district court or the appeals court (or both) flipped the imaginary coin is of course open for debate.

That's 45% of all cases appealed on Marksman grounds are reversed, which is probably a smaller percentage (selection bias), but that also has a lot to do with the truly horrendous drafting of many software patents.

I'd argue that 45% reversal rate really isn't that bad in this case, for a few reasons:

1. We're only talking about claim construction here, which amounts to determining what the boundaries of a patent are. Not patent invalidity, not determinations of infringement or anything else, but only claim construction. Only in those cases in which claim construction is appealed in those cases that don't settle, which is actually a pretty small percentage of all cases filed.

2. Claim construction is currently a matter of law. Virtually all matters of law are reviewed de novo. Now, you can argue that claim construction shouldn't simply be a matter of law, but that's inconsistent with american jurisprudence in general. The interpretation of virtually any legal document, like a contract or a will or a statute, is a matter of law, and appellate courts give no deference to lower courts when exercising their review.

3. The Federal Circuit is a specialized court with a lot of expertise in interpreting patent claims, much more so than a lot of district courts. A lot of district judges get a couple of patent cases a year, and have little to no expertise in the subject matter. It's not surprising that they'd get it wrong.

Quote:

Appeals are not supposed to be routine; they're supposed to be limited to exceptional circumstances. If every court case gets an appeal... well, you can infer the consequences.

Except that every case does get an appeal. They're limited by other doctrines, of course, such as only being able to appeal from a final judgment and the appellate court having to find "reversible error", but the loser in every case does have a right to appeal to an intermediate appellate court.

Of note, Judge O'Malley was fairly recently a district court judge, and soon after she joined the Federal Circuit I heard her give a talk where she effectively said that as a district court judge, they sometimes felt that no matter what Markman construction they made, it was going to be ignored on appeal. She said she was going to take care to respect the lower courts and their familiarity with the facts. So, tea leaf reading, I think she'll be on the side of giving some more deference to the District Court judges.

This is odd. Higher courts usually consider the opinions of the lower courts, at least a bit. It seems they should here too

In such cases where there is not de novo review, the appeals court show deference to the trial court's fact-finding because it makes no sense to double litigation costs and surmise factual/subjective information that was more readily available to the trial court, such as witness testimony in court. Often the appeals court has less information -- sometimes a transcript at best -- making the trial court a better determinant of fact. Markman hearings are an important part of patent litigation, but there is rarely any information presented in them that is not also identically available to the appellate court. Essentially both sides will state that "process output" is defined as "X" or "Y" to make "process output" fall squarely inside or outside of the patent claim. There's little else to consider other than the parties' filings and assertions, so there's no reason to afford a deference to the lower courts. Usually the higher courts are more specialized and are arguably better equipped to determine claim construction. That's why Markman hearings exist in the first place, since patent judges are often better suited to determine what a claim term means than a jury (seriously, try having a layperson read a patent and I guarantee you'll get 6 seconds in before their eyes glaze over).

I-ku-u wrote:

Is it worth noting that a 45% reversal rate is not very different from simply flipping a coin?

Edit (to add this afterthought): Whether that means the district court or the appeals court (or both) flipped the imaginary coin is of course open for debate.

That's 45% of all cases appealed on Marksman grounds are reversed, which is probably a smaller percentage (selection bias), but that also has a lot to do with the truly horrendous drafting of many software patents.

If the jury can't figure out what the claims mean, they should find that there was no infringment. This is half of what's wrong with our patent courts. The other half is that a LAYPERSON has no business being on a patent jury. Patents are not meant to be read by laymen. They are meant to be read by EXPERTS.

Amen @Shavano! This is the problem. Patents are so full of gibberish they don't meant shit. Seriously: Give it to an Engineer and they will be scratching their heads, but we trust a bunch of idiot judges and lawyers to argue this at great expense.

Amen @Shavano! This is the problem. Patents are so full of gibberish they don't meant shit. Seriously: Give it to an Engineer and they will be scratching their heads, but we trust a bunch of idiot judges and lawyers to argue this at great expense.

The lawyers are actually the sophisticated parties. Most of them have substantial training in the arts and quite a few have advanced degrees. If you're looking to blame someone, you should start with the USPTO. They're the ones that issue the dubious patents in question.

If the jury can't figure out what the claims mean, they should find that there was no infringment. This is half of what's wrong with our patent courts. The other half is that a LAYPERSON has no business being on a patent jury. Patents are not meant to be read by laymen. They are meant to be read by EXPERTS.

I thought the purpose of the patent was to protect for a limited time a monopoly to the inventor, but that the invention belongs to everyone. The disclosure is supposed to be done in such a way that a layperson should be able to reconstruct it.

If the jury can't figure out what the claims mean, they should find that there was no infringment. This is half of what's wrong with our patent courts. The other half is that a LAYPERSON has no business being on a patent jury. Patents are not meant to be read by laymen. They are meant to be read by EXPERTS.

I thought the purpose of the patent was to protect for a limited time a monopoly to the inventor, but that the invention belongs to everyone. The disclosure is supposed to be done in such a way that a layperson should be able to reconstruct it.

I think that someone "skilled in the art" should be able to reconstruct it, but you have a good point. A patent written to be hard to read should not be granted.

Yep, that's what I thought too. Throwing out the de novo standard could backfire as well. That would mean a much harder time for cases like Newegg's fight against the patent troll, where they lost, but was able to actually invalidate the patent on appeals! There would be less likelihood of that had the appeals court not been able to look at the case "from the ground up"

CAFC can't get anything right either - they're the most pro-patent court around. Who wants them *or* district figuring out software patents? Why don't we deal with the fact that we shouldn't have software patents at all in the first place? We did have that precedent stating exactly that for about 30 years in the first place, so it did work before.

CAFC can't get anything right either - they're the most pro-patent court around. Who wants them *or* district figuring out software patents? Why don't we deal with the fact that we shouldn't have software patents at all in the first place? We did have that precedent stating exactly that for about 30 years in the first place, so it did work before.

If the jury can't figure out what the claims mean, they should find that there was no infringment. This is half of what's wrong with our patent courts. The other half is that a LAYPERSON has no business being on a patent jury. Patents are not meant to be read by laymen. They are meant to be read by EXPERTS.

I thought the purpose of the patent was to protect for a limited time a monopoly to the inventor, but that the invention belongs to everyone. The disclosure is supposed to be done in such a way that a layperson should be able to reconstruct it.

For better or worse the statutory language has been interpreted to mean that a patent makes sense to one "skilled in the art". On one side it does have a gut appeal that the general population should be able to understand what a patent does, however, looking at the complexity of some of the claims there is no way that you could easily distill something that requires an advanced degree in science to the level of a layperson.

What I think would help overall is to eliminate software patents, and make the initial patent examination process more rigorous. It would also help if SCOTUS would kindly give us better guidelines on what kinds of business process material is patentable as opposed to the nebulous definition we got in Bilski. The USPTO swings between clearing the backlog of pending applications and in the process letting crappy patents through, and then when you get a big backlash on these crappy patents the emphasis goes to being more thorough.

It seems to me that "from the beginning" case consideration is the purest form of appeal, and I'm not convinced that a 44% reversal rate means much of anything beyond the fact that district judges aren't doing a good job in this area. The real solution: software patents must go.

" "voltage source means providing a constant or variable magnitude DC voltage between the DC input terminals," and the key issue was whether that term described a "rectifier," or a device that turns an AC power line into DC voltage."

The language in the patent screams that the inventor assumed a regulator. Regulators typically provide constant DC (or sometimes AC) regardless of the load. They are most of the circuitry you are paying for when you buy a power supply. Note, the key here is constant voltage within a specific range (often going down to zero) of current draw.

A rectifier converts AC to DC. A simple diode removes all negative voltages, while a full-wave rectifier will invert the negative input into positive voltage. The important aspect is the AC source. That isn't mentioned anywhere.

The real catch is that the lawyers for the patent can simply show any circuit that includes a rectifier (basically a single diode) and any other electric component will fall under the language of the patent. This is why any attempt to fix the patent mess we are in has to start with the laws the patent office is given (presumably outlawing software patents to start) and then with the patent office. The courts are no place to attempt to fix fully constitutional laws.

" "voltage source means providing a constant or variable magnitude DC voltage between the DC input terminals," and the key issue was whether that term described a "rectifier," or a device that turns an AC power line into DC voltage."

The language in the patent screams that the inventor assumed a regulator. Regulators typically provide constant DC (or sometimes AC) regardless of the load. They are most of the circuitry you are paying for when you buy a power supply. Note, the key here is constant voltage within a specific range (often going down to zero) of current draw.

A rectifier converts AC to DC. A simple diode removes all negative voltages, while a full-wave rectifier will invert the negative input into positive voltage. The important aspect is the AC source. That isn't mentioned anywhere.

As far as the patent goes the question is whether the construction of the claims implies any kind of DC source or a rectifier specifically. The language used is "voltage source means" and the relevant statute is 35USC112p6. If the language is found to invoke 112p6, then the issue at hand is what a 'person having ordinary skill in the art' would find it to mean, and "voltage source means" would then be interpreted as exactly that. If on the other hand the language does not invoke 112p6, then any means would be covered, not just what a PHOSITA would presume.

yet_another_wumpus wrote:

The real catch is that the lawyers for the patent can simply show any circuit that includes a rectifier (basically a single diode) and any other electric component will fall under the language of the patent. This is why any attempt to fix the patent mess we are in has to start with the laws the patent office is given (presumably outlawing software patents to start) and then with the patent office. The courts are no place to attempt to fix fully constitutional laws.

The patent is specifically on lighting, and fluorescent lighting in particular, so no, that is not the real catch of this at all.

" "voltage source means providing a constant or variable magnitude DC voltage between the DC input terminals," and the key issue was whether that term described a "rectifier," or a device that turns an AC power line into DC voltage."

The language in the patent screams that the inventor assumed a regulator. Regulators typically provide constant DC (or sometimes AC) regardless of the load. They are most of the circuitry you are paying for when you buy a power supply. Note, the key here is constant voltage within a specific range (often going down to zero) of current draw.

A rectifier converts AC to DC. A simple diode removes all negative voltages, while a full-wave rectifier will invert the negative input into positive voltage. The important aspect is the AC source. That isn't mentioned anywhere.

The real catch is that the lawyers for the patent can simply show any circuit that includes a rectifier (basically a single diode) and any other electric component will fall under the language of the patent. This is why any attempt to fix the patent mess we are in has to start with the laws the patent office is given (presumably outlawing software patents to start) and then with the patent office. The courts are no place to attempt to fix fully constitutional laws.